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How do you save money?

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This topic contains 2 replies, has 3 voices, and was last updated by Profile photo of Mary Schofield Mary Schofield 6 years ago.

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  • #20617

    I’m looking to cut corners a bit and save some money for life’s unexpected moments (hello leaking pipe!). What are some ways you save money?

    #20619

    Before you can save, I really believe you need to know what you spend. My husband and I do this 2 ways. First, we use Quicken to track almost every penny we spend (except where the cash ATM withdrawals go which are few and far between because almost everything goes on a credit card). At any moment, I know exactly how much we spend on eating out, clothing, enrichment activities, entertainment (baseball games, ITunes), donations, coffee, subscriptions, etc… It’s initially a lot of work to set-up but then it just takes 15-minutes here and there throughout the month to keep up with it. We run a report once a year and figure out what to cut (recently we cut out Netflix and replaced with Red Box – saves us $12.00 per month but like you said, every bit helps!)

    For the easier at a glance look, I have an excel doc that tracks our take home (what comes in after taxes) and what major expenses we have (mortgage, child care, medical insurance, gas, utility average, etc…)  This quick formula tells us how much "extra" we have to spend each month on all the other stuff that varies.  We probably look at that every 6 months.

    Once you know where you spend, you can figure out where to cut.  At the same time we cut Netflix out, we merged our cell phone accounts saving an additional $50.00 a month.  We immediately redirected that money – before it could start slipping through our fingers.  In our case, we were picking up a second car loan so we had lots of little places we needed to cut.  In your case, you could increase the emergency "leaky pipe" fund.

    Also, if you don’t already have one, I would suggest opening up an account you can’t access so easily.  For us it is a Capital One Account (formerly ING Direct).  We don’t have an ATM card or checks associated with the account.  We simply have a portion of our paychecks sent right into the account (our emergency fund account).  We can get the money, it just takes about 4-days to transfer so it forces you to plan your major spending.

    Good luck with your saving goals!

    #20620

    Toya C
    Participant

    I second the idea of setting up a separate savings account for "life’s little extras" that you direct deposit part of your check into. Even if it’s just a little amount, it’s something. And having it go to a separate account makes it it just that much harder to access it and spend it on something else.

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